The Dollar Index’s (DXY) recovery looks overstretched after having appreciated 3% so far this month, DBS’ FX analyst Philip Wee notes.

US Treasury bond yields stall near 4%

“Although the Fed has rolled back the market’s expectations for more of last month’s 50 bps rate cut, it plans to follow up with two 25 bps cuts on November 7 and December 18 after the US Presidential Elections on November 5.”

“With this month’s rise in the US Treasury bond yields stalling near 4%, the DXY should be lower, around 102 instead of higher and close to 104.”